Refining costs not imagined high
Refining has always been one of the core business segments of the two major oil companies. Sinopec (600028.SH, 0386.HK) listed the refining business as a separate segment to calculate the profit and loss; and PetroChina (601857.SH, 00857.HK) calculated the performance of the refining and chemical business together.
Sinopec once stated that the company's refining gross profit for the year was 290.5 yuan per ton, down nearly 13% year-on-year, mainly because the growth rate of refined oil prices was lower than the speed of rising crude oil prices.
The reporter saw from Sinopec's 2010 annual report that the prices for gasoline, diesel, and other products rose by 14.6% and 17.7% year-on-year, while the increase in crude oil realized price was as high as 45.4%, which is consistent with its statement.
In 2010, Sinopec’s refining segment’s operating income was 15.9 billion yuan, a decrease of 42.4% year-on-year.
CNPC also pointed out that due to factors such as rising crude oil prices and the incomplete adjustment of domestic refined oil prices, the profitability of the “refining and chemical†business still declined, and its operating profit was 7.847 billion yuan, which was a drop of nearly 55 percent from 2009. %.
However, due to the government's basic implementation of China's refined oil pricing mechanism last year, the price of gasoline and diesel was raised at a high level during the period of high crude oil prices. Therefore, the refining profits of the two companies declined in the current period, but they did not lose money.
An analyst from a brokerage in Shanghai told the reporter that taking Sinopec as an example, the gasoline and diesel oils refined in the first quarter were all purchased from domestic and overseas crude oil after November last year, and the crude oil price may be lower than now. Some, therefore, Sinopec's refining costs are not as high as it seems.
The data obtained by the reporter from related companies shows that from November last year to February of this year, the average price of crude oil imports was 78 US dollars / barrel, 83 US dollars / barrel, 88 US dollars / barrel and 92 US dollars / barrel. At present, WTI's price has risen to $108/barrel. These data can also be seen that the crude oil prices in November and December last year were slightly lower than the current price.
CICC also mentioned in the oil product price increase comments released yesterday that the cost of the oil company's oil refining business was the price of crude oil purchased 2 months ago. Therefore, the refining business of PetroChina and Sinopec Corp. may break even or slightly in the first quarter. profit.
No substantial losses will occur
Haitong Securities estimates that Sinopec’s refining EBIT (EBIT) at the first quarter of this year will be US$1.1/barrel, which is at a medium level. After April 7, the Development and Reform Commission raised the price of gasoline and diesel, "Our refining business in April is expected to obtain a normal profit of more than US$1 per barrel."
However, some people in the industry think that the domestic refining margin is almost zero.
Northeast Securities researcher Wang Weigang believes that the current refining company's refining margins have indeed dropped more, and domestic refining margins have returned to zero, but he does not believe that the company has suffered significant losses.
The reason for the decline in refining margins is that the average price of crude oil for 22 working days increased by US$14/barrel from February 20 to April 6 (the interval between domestic gasoline and diesel oil price adjustments), but after the price adjustment on April 7th by the Development and Reform Commission, Considering the proportion of production of steam, diesel, and coal, the break-even point of the domestic refining industry increased by approximately US$7.7/bbl, which means that the NDRC’s April price adjustment could not keep up with the increase in the average price of crude oil during the same period.
Peng Sen, deputy director of the National Development and Reform Commission, also judged that according to the current mechanism for the formation of refined oil prices, the international oil price will be between 80 and 100 US dollars per barrel, which will gradually reduce the profits of refinery companies to zero. However, he also stated that at present, domestic oil refining companies have already produced at a loss, and companies are adopting complementary measures upstream and downstream to cope with losses.
However, oil companies still have a bottom in their hearts. Before the NDRC adjusted prices for gasoline and diesel on April 7, Sinopec also mentioned in a non-public case that “the refining sector is currently losing money, but with the adjustment of refined oil prices, the refining sector will not lose money this year.â€
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